"“I am not going to rubber-stamp this settlement, and I cannot rubber-stamp this settlement,” the judge said, Bloomberg reported. “Is Mr. Musk getting some kind of special treatment in this case?” Sooknanan was also quoted as saying."
"Sooknanan said that dropping the demand for $150 million and imposing the settlement terms on a trust instead of Musk himself are both “red flags,” a Reuters report said. “Sooknanan also noted that SEC lawyers at a prior hearing to discuss the case had appeared surprised when lawyers for Musk revealed that they had been in settlement talks with the agency,” Reuters reported. Sooknanan called that fact another red flag."
"Under the settlement with the SEC, a trust in Musk's name would pay a $1.5 million civil penalty to the government and not admit that Musk committed any violation. The deal requires court approval, and Judge Sparkle Sooknanan expressed skepticism at a hearing yesterday in US District Court for the District of Columbia."
"In 2022, before buying Twitter outright, Musk purchased a 9 percent stake in the social network and failed to disclose it within 10 days as required under US law. The SEC lawsuit filed during the Biden administration said the late disclosure allowed Musk to keep buying shares at artificially low prices and underpay shareholders by at least $150 million."
A federal judge said she will not rubber-stamp an SEC settlement involving Elon Musk. The settlement would require a trust in Musk’s name to pay a $1.5 million civil penalty without admitting any violation. The original SEC lawsuit sought at least $150 million, alleging Musk failed to disclose a 9% stake in Twitter within 10 days in 2022. The late disclosure allegedly allowed Musk to buy shares at artificially low prices and underpay shareholders. The judge questioned the reduced demand, the use of a trust instead of Musk personally, and whether SEC proceedings reflected special treatment connected to the Trump administration. She also noted surprise by SEC lawyers when settlement talks were revealed.
Read at Ars Technica
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